Supreme Court New South Wales Medium Neutral Citation: Waterwood Hotel Management Pty Ltd v KOP International Pty Ltd & Anor. (No 2) [2015] NSWSC 866 Hearing dates: 1 July 2015 Date of orders: 01 July 2015 Decision date: 01 July 2015 Jurisdiction: Equity Division - Duty List Before: Kunc J Decision: Paragraph 7 of reasons Cases Cited: Waterwood Hotel Management Pty Ltd v KOP International Pty Ltd & Anor. [2015] NSWSC 852 Category: Costs Parties: Waterwood Hotel Management Pty Ltd ACN 603 620 702 (Plaintiff) KOP International Pty Ltd ACN 161 720 636 as Trustee for KOP Investment Trust ABN 77 331 076 903 (First Defendant) MOOT Hotel Management Pty Ltd ACN 168 791 008 Representation: Counsel: S. Burchett (Plaintiff) G. Sirtes SC (Defendants) Solicitors: Summit Legal ( Plaintiff) Juris Cor Legal (Defendants) File Number(s): 2015/175980 Publication restriction: No EX TEMPORE Judgment 1. HIS HONOUR: I delivered judgment in relation to the defendants' notice of motion in this matter yesterday: Waterwood Hotel Management Pty Ltd v KOP International Pty Ltd & Anor. [2015] NSWSC 852. The costs argument was stood over to today. These reasons should be read in conjunction with yesterday's judgment. Defined terms in yesterday's judgment apply to these reasons. 2. The defendants press for the usual consequence of Waterwood having failed in its application to extend the ex parte orders, namely that costs should follow the event so that Waterwood should pay the costs of the defendants' notice of motion. Waterwood responds that, in the unusual circumstances of this case, the just costs order is either that the costs of the defendants' motion be costs in the cause or, alternatively, that they should be the defendants' costs in the cause. 3. The primary basis for Waterwood's submission is that Waterwood lost the interlocutory application because of what might be termed the late revelation that KOP did not own the Business which it purported to sell to Waterwood. There is much force in this submission when it is recalled that in the HLA there was an express recital whereby KOP recited that it owned the Business. 4. As events developed from after the time when I made the ex parte orders, the defendants filed evidence on Monday, 15 June 2015 in support of their motion which, for the first time, provided clear evidence of the possibility that KOP did not own the Business. However, I accept the submissions put by Mr Burchett of Counsel for Waterwood that it was not really until the filing of submissions on the night before the hearing of the defendants' motion that there was an express repudiation by KOP of the effect of the recital in the HLA. KOP's submissions made it clear that in addition to maintaining the defendants' submissions concerning arrears of rent and other breaches of the HLA (as to which I came to the conclusion that there was a real doubt as to whether those allegations were correct), the defendants' principal line of defence to the application was that KOP was not the owner of the Business. Reducing matters to their absolute essentials, Waterwood lost the application by reason of the principle "nemo dat quod non habet" ("no one can give what he does not have"), namely that KOP did not have title to that which it purported to sell. 5. The just outcome of these proceedings requires taking into account that KOP's position did not ultimately become clear until the filing of its submissions on the night before the substantive hearing. It is also necessary to take into account that the defendants primarily succeeded in resisting the continuation of the ex parte orders because of their position that KOP did not own the Business. 6. Costs are ultimately in the discretion of the Court. That discretion is unfettered but has to be exercised judicially. It is true that costs usually follow the event but in this case the matters to which I have just referred warrant a departure from the usual rule. 7. The appropriate outcome is that there should be no order as to costs with the intention that each party will pay their own costs of the defendants' notice of motion up to and including Wednesday, 17 June 2015. The costs of the hearing on 18 June 2015 and thereafter will be the defendants' costs in the cause. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 July 2015